While many ultra-wealthy Americans say they would like to achieve more with their philanthropy and over a hundred and forty have signed the Giving Pledge, their giving in support of social-change efforts often is hampered by structural barriers, a report from the Bridgespan Group finds.
According to the report, Four Pathways to Greater Giving (executive summary/full report, 30 pages, PDF), ultra-high-net-worth U.S. households — defined as those with at least $500 million in assets — collectively gave just 1.2 percent of their assets, or $45 billion, to philanthropic causes in 2017. For those households to spend down half their wealth over twenty years, they would need to give more than 11 percent of their assets to charity annually. Funded by the Bill & Melinda Gates Foundation, the study identified three major barriers that keep the ultra-wealthy from making large commitments in support of initiatives in areas such as human/social services, the environment, and international development: a negative feedback loop in which nonprofits don't ask for eight-figure grants because donors so rarely make them; a risk-averse mindset among donors with respect to innovative social-change initiatives; and a broken "marketplace" for matching available funding with opportunities.
With an eye to doubling giving by the ultra-wealthy in support of social change from $45 billion to $90 billion per year, the report highlights four pathways that could help address those obstacles. The study estimates, for example, that aggregated funds such as those offered by Blue Meridian Partners and The END Fund could spur more than $5 billion in annual giving. The study also argues that a "community foundation for America" that matches funders with community-led efforts to increase economic mobility could unlock at least $5 billion a year; that greater access to strategic philanthropy services could increase annual giving by ultra-wealthy donors by some $2 billion a year; and that strengthening social-change nonprofits through support for capacity-building initiatives — including helping them plan for and deploy large gifts in the future — could unlock upwards of $10 billion annually.
"We are at the beginning of an estimated $30 trillion wealth transfer from baby boomers to their heirs [that] will play out over the next two to three decades," the report's authors write. "If the wealthiest families surmount the challenges to giving more, they will seize a once-in-a-generation opportunity to help put society on a path to enduring progress."